Onex Acquires Stake in Jeld-Wen
Onex Corp., a Toronto-based private equity firm, is investing $675 million to acquire a significant minority interest in Jeld-Wen Holding Inc. The Klamath Falls, Ore.-based manufacturer will continue to be majority-owned by the Trust of Mr. Richard Wendt, members of the Wendt family, Jeld-Wen employees and other existing shareholders, it is reported.
With reported 2010 revenue of more than $3 billion, Jeld-Wen is one of the world’s largest manufacturers in the world of interior and exterior doors, windows and related products. The company operates 123 manufacturing and distribution centers and employs approximately 20,000 people in more than 25 countries across North America, South America, Europe, Australia and Asia.
“We believe that Jeld-Wen’s competitive position and well-known brands in markets around the world position the company very well to take advantage of the eventual recovery in global housing markets,” says Anthony Munk, an Onex managing director. “We are delighted to be investing alongside the Wendt family, and look forward to working closely with Jeld-Wen’s management team and employees to build on the company’s success.”
“This is an exciting time in our company’s history and we’re pleased to be partnering with Onex, who shares our vision for the company’s future," says Rod Wendt, Jeld-Wen CEO.
“This proprietary opportunity is the result of our focus and expertise in the building products sector and our industrial partnership with Philip Orsino, a founder and former CEO of Masonite International,” Munk notes. Following the closing, Munk and Orsino will join the Jeld-Wen's board of directors.
Under the deal, Jeld-Wen’s management, workforce and corporate culture will remain firmly rooted and intact, the companies report. Jeld-Wen will continue as a private company headquartered in Oregon, while also maintaining its employee stock ownership plan and its vast workforce.
"Onex has a tremendous amount of confidence in our existing management team and the skills and strengths of our workforce," reports Teri Cline, a spokeswoman for Jeld-Wen. "They also have a high degree of respect for the quality of the relationships that have developed between Jeld-Wen and our loyal channel partners and dealers."
The Onex investment, she states, "will result in a capital structure that will permit us to take full advantage of the growth opportunities in the R&R and new construction markets as those markets recover. It will facilitate investment in products and projects that will bring value to our customers and shareholders."
The $675 million investment will be made by Onex Partners III, Onex’ flagship private equity fund, of which approximately $120 million will be Onex’s share as a limited partner in the fund, it is reported. The investment will be made in two phases: first, a $475 million of convertible preferred stock representing a 39 percent ownership stake; and then a $200 million convertible note that can be redeemed within 18 months with proceeds from the sale of certain non-core assets, according to Onex officials. The transaction is anticipated to close in the second quarter subject to customary regulatory approvals and completion of the associated debt financing.
Founded in 1984, Onex manages investment platforms focused on private equity, real estate and credit securities. In total, the company manages approximately $14 billion, of which $10 billion is third-party capital. Onex also invests its own capital directly and as a substantial limited partner in its funds.